A UNIQUE MISSION AND A DUAL ECONOMIC AND SOCIAL …

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A UNIQUE MISSION AND A DUAL ECONOMIC AND SOCIAL PROJECT AT THE HEART

OF THE COMPANY

FROM INTEGRATED THINKING…

“How can a company

expect to thrive in an

economic and social desert?”

“As CEO, I pledge to pursue

Danone’s dual commitment

to business success and social

progress”

Health missionFoundation of

the dual projectManifesto & Danone 2020

“The frontiers of the company

do not stop at the factory

gates…”

1972 2009 2014

BRING HEALTH THROUGH FOOD TO AS

MANY PEOPLE AS POSSIBLEOUR MISSION

22016 INTEGRATED REPORT SUMMARY

DANONE


DANONE

THE MANIFESTO: MOBILIZING EMPLOYEES TO SUPPORT DANONE’S AMBITIONS



DANONE

TRANSLATING OUR VISION OF ALIMENTATION WITH OUR ALIMENTATION TREE



DANONE

EVOLUTION OF PRODUCTS PORTFOLIO AND MARKETS IN LINE WITH OUR MISSION

FOCUSINGTHEPRODUCTPORTFOLIOON HEALTHYFOODCATEGORIES

REACHINGA NEWGLOBALEQUILIBIRUM


1996 2016


DANONE

MATERIAL ASPECTS

NUTRITION & HEALTH SOCIAL ENVIRONMENT

COMMUNIT IES RESPONSIBLE PROCUREMENT STRATEGY

FIGHT AGAINS T FRAUD AND

CORRUPTION

1 Product ion and

commercial izat ion of safe

and heal thy products

2 An open and construct ive

social dialogue wi th employees

3 Assessment of suppl iers ’

CSR performance

4 Guarantee of employees ’

heal th and wel lbeing at work

5 Management and protect ion

of water resources

7 Guarantee of access

to water for everyone

8 Fight against fraud

and corrupt ion

9 Indiv idual employee

development

10 Tak ing into account

of CSR chal lenges

in the Danone’s strategy

11 Reduct ion in the quant i ty

of waste and recycl ing

12 Sustainable relat ionships

wi th suppl iers

13 Reduct ion of the

envi ronmental footprint

of products and activi t ies

14 Support ing the local

economy and local supply

15 Promotion of a heal thy

l i festyle and nutr i t ional

educat ion

6 Sustainable raw mater ials

supply



DANONE

HEALTHIER FUTURE APPROACH

UNIQUE BUSINESS APPROACH BETTER HEALTH

BETTER LIVES

Danone’s ambition is to generate strong, profitable and

sustainable growth by 2020.

Danone believes that healthy food starts with healthy

nature.

Danone wants to influence healthier eating and drinking

practices, to encourage healthier lives.

In line with our dual commitment to social progress and

business success, Danone creates social value.

BETTER WORLD



DANONE

OUR SOCIAL INNOVATION PLATFORMS

DANONE SUPPORTS FOUR FINANCIAL FUNDS:

• DANONE COMMUNITIES,

• THE DANONE ECOSYSTEM FUND,

• THE LIVELIHOODS CARBON FUND,

• THE LIVELIHOODS FUND FOR FAMILY FARMING.

These funds anchor the inclusion of sustainable development challenges in Danone’s strategy, thereby giving even more meaning to the company mission: to bring health through food to as many people as possible.



DANONE

BETTER WORLD : STRATEGY AND COMMITMENTS

…TO INTEGRATED REPORTING

At Danone, we believe that healthyfood starts with a healthy planet. Theinitial raw materials used in ouringredients are rain, soil andsunlight—natural resources thatcombine to grow the food, feed thecows and provide the water we needto make healthy foods and beveragesfor our consumers around the world.

Which is why our Nature strategy is built around four priorities: climate, water, packaging and sustainable agriculture. We’re working hard to promote sustainable farming, make water cycles healthier, achieve zero net carbon emissions in the long-term, and give all of our packaging a second life

PROTECTING OUR STRATEGIC RESOURCE CYCLES

We’re committed to strengthening our strategic resources—milk, water and plastic—and managing them as cycles rather than taking a conventional linear approach. The only way to achieve these goals is to rely on our unique organization and work with our partners along our value chain.


DANONE

BETTER WORLD : STRATEGY AND COMMITMENTS


WHY IT MATTERS

HOW IT WORKSWe have committed to a climate policy

with a long-term goal of zero net carbon

emissions—and not just direct emissions,

but indirect emissions as well, what we

call our extended scope of responsibility,

including agriculture. To reach this target,

we will rely on co-creation, working with

the farmers, suppliers, customers and

local communities within our ecosystem

to find solutions.

Climate change affects the natural cycles

of water, soil and biodiversity as well as

the ecosystem of services that play a

vital role in the food system, such as

forests. Overcoming this challenge is

essential to making our global food cycle

more resilient and growing our business

sustainably in the future. Bottom line: we

need to fight climate change by reducing

our environmental footprint and helping

nature sequester more carbon.

Helping to protect water cycles at local

level is critical to our ability to strengthen

the resilience of Danone’s supply chain,

paving the way for sustainable business

growth in the future.

We are therefore committed to

preserving this vital resource and to

respecting its natural cycles by adopting

responsible practices at every stage of

the value chain.

Water is a precious, sometimes scarce

resource that must be used in

cooperation with local ecosystems and

communities. The United Nations

Sustainable Development Goal for

Water establishes clear linkages with

other goals related to health, food

security, climate change and

ecosystems’ resilience to disasters.

WHY IT MATTERS

HOW IT WORKS

WHY IT MATTERS

HOW IT WORKS

Packaging has an important role to play

by protecting the nutritional benefits and

quality of our products and allowing

them to be stored, transported and used

safely. However, packaging also

presents challenges. It uses valuable

resources in its design and generates

waste when not recycled. Which is why

we’re committed to turning packaging

waste into a resource

Danone’s Packaging Policy was

published in November 2016, with the

ambition to “Co-build the circular

economy of packaging: sourcing

sustainable materials and creating a

second-life for all plastics”.

Breakthrough innovation, whether

technical, social or environmental, as

well as collaboration all along the supply

chain, will play key roles in this

transformation.

WHY IT MATTERSDanone’s operations are linked directly to

nature and to farming, which now

presents major challenges, including food

safety, competitiveness, price volatility

and access to raw materials. This means

that the sustainability of our business

hinges on our ability to strengthen and

protect our global food cycle in terms of

both quality and quantity.

In agriculture, we’re looking for ways to

source sustainably, promoting farming

models that are competitive but

respectful of natural cycles and

ecosystems. We will also continue to

work with farmers to develop new tools

and solutions to support climate smart

farming.

HOW IT WORKS


DANONE

BETTER WORLD : DASHBOARD


2016 PERFORMANCE TARGETS


DANONE

BETTER WORLD : DASHBOARD


2016 PERFORMANCE TARGETS


DANONE

BETTER WORLD : PROJECT


ORISA ORGANIC RICE

HELPS PROTECT

WATER QUALITY

Water is at the heart of Aqua’s

business, which makes stewardship

for the entire water cycle vital for this

Indonesian subsidiary of the Waters

Division. In the infiltration area

collecting water used at the

company’s Cianjur plant in Indonesia,

Aqua mitigates risk through a

collaborative approach based on

educating smallholders and

encouraging them to switch to

organic farming.

Protecting its infiltration area is essential for Aqua

to secure high-quality water for years to come, and

demonstrate its commitment to preserving water

sources. The farming community is a key partner in

this initiative, and Aqua has invited members to

implement healthy agricultural practices.

Aqua worked closely with over 700 farmers

working 89 hectares of land to encourage a switch

from chemical to organic production. Since organic

farming is still a niche market, the company

created a new brand of organic rice, Orisa, and

then supported market access through its more

than 350 AHS (Aqua Home Service) outlets. Today

there is an efficient path to market: Aqua

distributors pick up farmers’ rice when they stop in

to drop off Aqua water jugs.

This project delivered a quadruple win:

Aqua gets reliable water quality while

strengthening its community, as farmers make a

good income from organic rice production. And

Aqualady (AHS) outlets get additional revenue by

selling organic rice at their stalls. Last but not least

Aqua successfully promotes a healthy lifestyle

through affordable organic rice, establishing

credibility with stakeholders.


DANONE

THE DANONE WAY PROGRAM


• DANONE WAY IS AN INITIATIVE THAT PROMOTES DEPLOYMENT OF BEST PRACTICES IN SUSTAINABLE DEVELOPMENT

• DANONE WAY OFFERS SUBSIDIARIES A PROCESS BUILT ON CONTINUOUS PROGRESS

BETTER HEALTH

73%

of subsidiaries systematically consider three points in

recommendations for new product launches: appropriate

nutritional composition vs needs of target consumers;

comparison of nutritional composition to alternatives available on

the market; consistency of advertising/communications and

nutritional quality (no possible comparison as it is a new practice).

65%of subsidiaries have teamed up with local stakeholders to

address a relevant public health issue (no possible comparison

as it is a new practice).

BETTER WORLD

67%of subsidiaries have adopted a one or two year roadmap to

reduce their carbon footprint on their Direct Responsibility

Scope (production, packaging, logistics, product end of life,

etc.) in keeping with Danone’s targets. (vs. 69% in 2015)

63%of subsidiaries have a concrete action plan with local or

centralized procurement teams that shows progression to

eliminate deforestation from/due to soy by 2020 in line with

Danone’s commitments described in the soy Policy. (no

possible comparison as results were not published in 2015)

UNIQUE BUSINESS APPROACH

95%of subsidiaries have communicated to all required

employees the latest version of the Compliance Policies and

Code of Business Conduct (vs 94% in 2015).

71%of subsidiaries have set up a cross-functional working

group or committee on sustainability, including a Danone

Way coordinator and the head of Public Affairs

(vs 65% in 2015).

BETTER LIVES

80%of subsidiaries formalized in minutes the

information/discussion meetings between management and

employee representatives bodies. (vs 86% in 2015)

98%of subsidiaries have set up a “learning plan” and budget

allocation target for collective & individual needs for all

populations (workers, staff and supervisors, managers,

sales representatives if applicable). (vs 95% in 2015)


DANONE

SOCIAL INNOVATIONS KPI’S


SICAV

SOCIAL

MEASURING THE

COMMITMENT OF

DANONE’S EMPLOYEES

OF THE TOTAL PERFORMANCE OF THE

SICAV (MUTUAL FUND).

The indicator refers to the total performance net

of fees over 5 years. (it was 8.55% in 2015)

DANONE’S EMPLOYEES REPRESENT 23% OF

THE DANONE COMMUNITIES FUND.

(vs 20% in 2015)

OF DANONE EMPLOYEES IN FRANCE

SUBSCRIBED AT LEAST ONCE TO THE DANONE

COMMUNITIES FUND IN 2016.

(VS 34% IN 2015)

10.29%

43%

23%

1 Million

300,000

700,000

BENEFICIARIES IN TOTAL.

The indicator refers to the total number of

beneficiaries of the social businesses

supported by Danone Communities, in

regards to the 8 countries in the Fund.

BENEFICIARIES IN THE FIGHT

AGAINST MALNUTRITION AND

POVERTY.


beneficiaries of the nutrition social

businesses supported by Danone

Communities.

BENEFICIARIES WITH ACCESS TO

DRINKING WATER.


beneficiaries of the water access social

businesses supported by Danone

Communities.

9 BUSINESSES

8 COUNTRIES


DANONE



Percentage of milk from

Danone Ecosystem Fund

projects vs total sourcing

of Danone concerned

subsidiaries

This indicator refers to the

volume of milk sourced from

projects as a percentage of

total milk sourced by Danone

concerned subsidiaries over

the same period.

Sales generated by

Danone Ecosystem

Fund capabilities

This indicator refers

to sales generated

by business under

all projects (not

exclusively Danone).4,650 jobs created

40,912 people professionally empowered

2.9M indirect beneficiaries

22,500 women professionally empowered

46 CBUs

56 NGO partners

139 M€ funding

62 M€ Ecosystem

77 M€ co-funding

67 Projects

29 Countries

SOCIAL IMPACT

ECONOMIC IMPACT

ENVIRONMENT IMPACT


DANONE



SOCIAL IMPACT

THE LIVELIHOODS CARBON FUND THE LIVELIHOODS FUND FOR FAMILY

FARMING.

Achievement since 2011

107,000 households equipped with efficient cook stoves in 2016

(vs 56,000 in 2015)

Objective:

120,000 households equipped with efficient cookstoves

ENVIRONMENTAL IMPACT

Achievements since 2011

122 million trees planted in 2016 (vs 120 million in 2015)

Objective

130 million trees planted

9 active projects:

• 3 ecosystem restoration projects

• 3 agroforestry projects

• 3 rural energy projects

Objective of 200,000 farmsconverted to sustainable

agricultural practices

Objective of 2,000,000 peoplepositively impacted

120,000,000€Total investment volume objective

3 projects will be launched in 2017

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A UNIQUE MISSION AND A DUAL ECONOMIC AND SOCIAL …